Grain markets seek guidance
Barley continues to find its way into feedlots.
Grain markets continue to seek guidance from our global counterparts while local markets remain subdued with lack of interest on both the buyer and grower selling sides. While the USDA have just about caught up on their reports from the Government shutdown, technical selling, an increasing US carryout and the unknown surrounding the outcome and timing of any US/China deal, continue to weigh on Chicago Board of Trade Wheat Futures. Despite a small rally mid last week they lost ground to finish the week in the red.
Domestically, barley continues to find its way into feedlots posing better value while it maintains a $40+ spread to wheat. Similarly it is seeing more interest on the buyside as some consumers extend their coverage into the middle of the year. After a slow start, Newcastle and Port Kembla track markets picked up a few dollars later in the week. However barley markets continue to wait on the Saudi tender to provide a potential export outlet for both WA and SA and assist traders in formulating their next move.
Sorghum values started this week much where they left off the previous, with Brisbane track sitting around $355/mt and Newcastle track and delivered bids shown at $385/mt. Continuing news of a large portion of the NSW crop being baled, along with lower than expected yields and quality concerns have failed to fuel any fireworks in the sorghum markets while it continues to try and find buyers. All is still quiet on the Chinese front for Baijiu buying also, limiting export prospects. Discounts to SOR2 continue to range broadly between $20-50, in some cases becoming lighter as harvest progresses and the lack of SOR1 becomes apparent.
While ABARES released a forecast that Australian wheat production is expected to rise 38% to 23.9mmt in 2019/20, this is dependent on receiving a ‘normal’ season with average rainfall. It remains to be seen whether a break will arrive to present sowing opportunities. In the mean time rotation plans continue to be formulated, fingers tightly crossed and weather apps regularly checked.
For more information contact AWB Grower Service Centre - 1800 447 246
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